Investment Bank Report: Healthcare Reform Not a Boon to Medtech

As reported in a story published recently on MassDevice.com, a report from an Orange County-CA investment bank asserts that healthcare reform will not be a significant boon to medical device companies.

The report was produced by Roth Capital Partners and contends that the "millions of patients that will come into the healthcare system as a result of the Patient Protection & Affordable Care Act" will not offset the 2.3% medical device tax.

Specifically, the report cites the performance of nine medical device companies in Massachusetts, where the universal healthcare law passed in 2006 serves as a kind of model for national healthcare reform.

"Eight out of 9 companies in our analysis did not see any sign of a windfall when universal healthcare was implemented in Massachusetts. Even more striking, most saw relative under-performance in this state," MassDevice.com quoted from the report.

There is "currently no independent analysis of the impact of Massachusetts healthcare reform on the medtech industry, although several companies have performed internal audits," MassDevice.com added.

An independent study of Massachusetts's healthcare reform by the Kaiser Family Foundation showed that the law successfully reduced the number of uninsured to 6.3%, a 5% reduction from 2006 and more than two-thirds lower than the national average, which increased 7% to 18.4% in 2010. However, the reforms haven't helped reduce costs there, the Kaiser researchers concluded.

The Roth report was presented at a meeting last week held in Washington, D.C. and hosted by CONNECT, an organization that supports innovation in technology and life sciences in the San Diego area.